Excellent production performance gave strong start to 2009

 

Total production of the company's active pharmaceutical ingredient in the quarter was 368 tonnes in the quarter (256 tonnes), up 19.2 per cent from the same quarter last year. The increase was driven by an excellent production performance in the Sandefjord plant. in-sourcing of intermediate products also contributed to increased output from the production facility. The in-sourcing will continue throughout 2009. In addition, further successful upgrading and de-bottlenecking of critical steps in the production process is expected to increase capacity at the Sandefjord plant in the second half of 2009.

 

The group's gross margin for the first quarter was 74.4 per cent (79.7 per cent), and shipped volumes in the quarter reached 294 tonnes (239 tonnes).

 

EBITDA for the quarter was up 34.9 per cent to NOK 164.1 million (NOK 121.6 million), reflecting the high production capacity. The EBITDA margin was 45.7 per cent (47 per cent), impacted by increased operating expenses.
 
The Kalundborg facility recently started to produce its first batches of low-concentrate intermediate products, and initial testing of all critical equipment and systems has been successfully executed. Fully integrated laboratory systems are now in place and test production with crude fish oil has been successfully carried out. The first commercial shipment from Kalundborg is expected to be made in the first quarter of 2010 and the targeted total investment of NOK 1.9 billion remains unchanged.

 

Statistics from IMS Health show that the growth in underlying end-user sales continued in the first two months of 2009. In the USA, Lovaza(TM) is continuing to capture an increasing market share and achieved 17.2 per cent share of new prescriptions (NRx) in the non-statin dyslipidemic market (as of late April 2009) compared to 13.3 per cent market share in the same period last year. The share of total prescriptions (TRx) grew to 14.9 per cent (as of late April 2009) compared to 11.5 per cent at mid April 2008.

 

IMS Health also reported that total end-user sales in the USA amounted to USD 92 million in the first two months, with a current run-rate of USD 595 million at 28 February 2009. Due to currency fluctuation, the European growth in sales value was flat year-on¬year, amounting to USD 45.4 million YTD February 2009 compared to USD 45.3 million for the first two months of 2008. However, the growth in volume continued, with 14 per cent increase in volume from the same period last year. Total end-user sales in the group's eight major markets amounted to USD 140 million for the first two months of 2009, with a run-rate at 28 February of USD 860 million.

 

During March 2009, the group received paragraph IV notification letters from Teva Pharmaceuticals USA, PAR Pharmaceutical, Inc. USA and Apotex Inc. The companies said they intended to market a generic version of Lovaza(TM) before the expiration of US patents Nos. 5 502 077 ('077 patent) and 5 656 667 ('667 patent). Pronova BioPharma has full confidence in the protection afforded by its intellectual property portfolio for the Omacor® and Lovaza(TM) brands and will vigorously defend and enforce its patents.

 

Due to the excellent production output in the first quarter of 2009, the group has raised its previous full year-production target of 1 500, and now expects to produce 1 550 to 1 600 tonnes in 2009. Importantly, the Kalundborg plant recently started its first test production of intermediaries from crude fish-oil, ahead of schedule.

 

The plant is well on track to supply intermediate products to the plant in Sandefjord, Norway by the end of the first half of 2009. This supply of intermediate products will play an important role to achieve the updated production target, enabling the company and its partners to meet the continued strong end-user demand. The first commercial shipment from the plant is expected to take place in the first quarter of 2010.

 

The difference between shipped and produced volumes in the first quarter was due to increased volumes sent to capsulation. These volumes will be shipped to the European markets in the second and third quarters of 2009. Omacor®/Lovaza(TM) is growing at a rapid pace in all markets and the positive trend is expected to continue and the group expects partner demand in 2009 to exceed production capacity.

 

Omacor®/Lovaza(TM) is growing at a rapid pace in all markets and the positive trend is expected to continue. The group expects partner demand in 2009 to exceed production capacity.

 

The complete first quarter report is available at www.newsweb.no and at www.pronova.com.

 

The company will present the results today at 08:30AM CET/07:30 GMT. The presentation will be webcasted live and can be accessed at www.pronova.com.  (Internet explorer web browser needed). In addition, the company will host a telephone conference which opens for Q&A immediately after the presentation.

 

Please dial the following numbers:
Country Number
International Toll Number: UK: + 44 (0)207 108 62 05
International Toll Number: SE: + 46 (0) 8 506 269 04
International Toll Number NO: +47 21 51 11 81, PIN: 457416#
No dial-in code is required for UK and SE Toll Numbers.
(Participants are asked to connect 5 minutes before the conference)

-- Ends --

 

For further information, please contact:

Hilde H. Steineger, Head of IR +47 48 00 42 40
Morten Jurs, CFO +47 22 53 49 10

 
About Pronova BioPharma

Pronova BioPharma is a global leader in the research, development and manufacture of marine-originated omega-3 derived pharmaceutical products.  Pronova BioPharma's first commercialized product is branded as Omacor® in a number of countries throughout Europe and Asia and as Lovaza(TM) in the USA. The product is manufactured at the company's plant in Sandefjord, Norway using a unique and complex process. An additional manufacturing plant is under construction in Kalundborg, Denmark and is expected to be operational in the first quarter of 2010.

Omacor®/Lovaza(TM) is the first and only EU- and FDA-approved omega-3 derived prescription drug. The drug is prescribed as an adjunct to diet for the treatment of elevated levels of triglycerides in humans, a condition known as hypertriglyceridemia (HTG), a form of dyslipidemia (or disorder of lipid metabolism). Very high triglycerides have been linked to a number of cardiovascular diseases. Omacor® is also approved in key European and certain Asian markets for the secondary prevention of post-myocardial infarction, or Post-MI, the period following the initial survival of a heart attack.

Omacor®/Lovaza(TM) has been demonstrated in a number of clinical trials to be a potent triglyceride-lowering agent as a monotherapy. It has been documented to be efficacious, safe, and highly complementary to other lipid-lowering agents, such as statins, and can be used in concomitant treatment for mixed dyslipidemia. In addition, Pronova BioPharma is involved in various projects to develop Omacor®/Lovaza(TM) in a number of cardiovascular indications, including as a combination therapy with statins for mixed dyslipidemia which management believe represents a major market opportunity for the group.

Pronova BioPharma's global network of license and distribution partners includes: Reliant Pharmaceuticals (owned by GlaxoSmithKline PLC) (USA), Takeda Pharmaceutical (Japan), Prospa (Italy) and Solvay (UK, Germany and others).  The combined sales force from this network focused on the sale of Omacor®/Lovaza(TM) is approximately 2 650 sales representatives, of which about 1 500 are employed by Reliant Pharmaceuticals in the USA.

Omacor®/Lovaza(TM) was launched in 2005 in the USA and in major European markets, such as France and Spain. IMS Health reports that global end-user sales of the product have increased from US$144 million in 2005 to US$ 778 million in 2008. The current annual run rate for end-user sales is estimated at US$ 952 million (as of 31 December 2008), and the company estimates that approximately one million patients are currently on a prescription for Omacor®/Lovaza(TM).

Pronova BioPharma had revenues of NOK 1 301 million and EBITDA of NOK 603 million in 2008. The company is listed at Oslo Børs.  See www.pronova.com for more information.